It is obvious that local governments cannot do without central government transfer; however, coupling with internal competition can fix decentralization for Africa’s development. Our recent study in Benin shows that when one local government received funding, its neighbors, were inspired to invest more too. With fair funding and a touch of healthy competition, decentralization can move from promise to power, driving growth, reducing inequality, and facilitating development.

Decentralization improves governance and local participation in development, but it also fuels inefficiency when there is unguided creation of districts. Many decentralized districts in Africa are poor in revenue generation, dependent on central government transfers, and burdened by high administrative costs, leaving little for investment. Compounded by a lack of competition for innovation and leadership in some countries, decentralization risks becoming stagnant rather than

The impact of decentralization is not a yes-or-no question. It is about how reforms are designed and when they are rolled out. Decentralization does not benefit all communes equally, its success depends on the ability to raise more internally generated revenues........